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H.B. 83





Sponsor: Ann W. Hardy

             6      LONG TITLE
             7      General Description:
             8          This bill modifies the Utah State Retirement and Insurance Benefit Act by authorizing
             9      the maximum actuarial funded ratio of the retirement systems to reach 110%.
             10      Highlighted Provisions:
             11          This bill:
             12          .    authorizes the actuarial funded ratio of the retirement systems to reach and be
             13      maintained at 110%; and
             14          .    prohibits contribution rate increases to attain an actuarial funded ratio greater than
             15      100%.
             16      Monies Appropriated in this Bill:
             17          None
             18      Other Special Clauses:
             19          None
             20      Utah Code Sections Affected:
             21      AMENDS:
             22          49-11-301, as renumbered and amended by Chapter 250, Laws of Utah 2002
             24      Be it enacted by the Legislature of the state of Utah:
             25          Section 1. Section 49-11-301 is amended to read:
             26           49-11-301. Creation -- Board to act as trustees of the fund -- Commingling and
             27      pooling of funds -- Interest earnings -- Funded ratio.

             28          (1) There is created a common trust fund known as the "Utah State Retirement
             29      Investment Fund" for the purpose of enlarging the investment base and simplifying investment
             30      procedures and functions.
             31          (2) (a) The board shall act as trustees of the Utah State Retirement Investment Fund
             32      and, through the executive director, may commingle and pool the funds and investments of any
             33      system, plan, or program into the Utah State Retirement Investment Fund, if the principal
             34      amounts of the participating funds do not lose their individual identity and are maintained as
             35      separate trust funds on the books of the office.
             36          (b) (i) In combining the investments of any fund, each of the participating funds shall
             37      be credited initially with its share of the total assets transferred to the Utah State Retirement
             38      Investment Fund.
             39          (ii) The value of the transferred assets shall be calculated in accordance with generally
             40      accepted accounting principles.
             41          (c) Subsequent transfers of additional capital from participating funds shall be credited
             42      similarly to its respective trust account.
             43          (d) The income or principal or equity credit belonging to one participating fund may not
             44      be transferred to another, except for the purpose of:
             45          (i) actuarially recommended transfers in order to adjust employer contribution rates for
             46      an employer that participates in both contributory and noncontributory systems; or
             47          (ii) transfers which reflect the value of service credit accrued in different systems
             48      during a member's career.
             49          (3) The assets of the funds are for the exclusive benefit of the members, participants,
             50      and covered individuals and may not be diverted or appropriated for any purpose other than
             51      that permitted by this title.
             52          (4) (a) Interest and other earnings shall be credited to each participating fund on a pro
             53      rata equity position basis.
             54          (b) (i) A portion of the interest and other earnings of the common trust fund may be
             55      credited to a reserve account within the Utah State Retirement Investment Fund to meet
             56      adverse experiences arising from investments or other contingencies.
             57          (ii) Each participating fund shall retain its proportionate equity in the reserve account.
             58          (5) (a) The actuarial funded ratio of the systems may reach and be maintained at 110%,

             59      as determined by the board's actuary using assumptions adopted by the board, before the board
             60      is required to certify a decrease in contribution rates.
             61          (b) The board may not increase contribution rates to attain an actuarial funded ratio
             62      greater than 100%.

Legislative Review Note
    as of 1-9-04 3:37 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

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